Will a beer duty cut really benefit licensees?

By Ed Bedington

- Last updated on GMT

Will a beer duty cut really benefit licensees?

Related tags Beer duty cut National living wage Beer Brewery Public house

It’s no great surprise that licensees are calling for more than just a cut in beer duty from next month’s Budget.

While hopes are high for a fourth consecutive cut to beer duty — and as I’ve said before, it’s great PR for the sector — it will mean little to those on the front line, the licensees.

The breweries are calling on the wider industry to support the campaign for a cut but, for those at the retail end, where’s the incentive? As one licensee put it, all a cut will achieve is to improve the brewery’s margins — few, if any, will pass on any kind of reduction in beer prices, in fact so far it has been quite the opposite.

Of course, you could argue that a reduction in costs for the breweries means they can support the industry in others ways, invest in operational improvements, or launch new products to generate longer term support for the sector.

However, having had three cuts so far, and little in the way to show for it from a retail perspective, I can’t blame operators for being cynical about such claims.

If the breweries want a united front to this campaign, perhaps they need to invest some time into explaining to operators just how the duty cut will improve matters for all in the sector, rather than just their own bottom line. In fact, I’d be fascinated to hear it as well!

It’s a bit of a cheek to be calling for support to cut the duty rates, while raising your own prices at the same time, often with woolly justification!

Meanwhile, reading through some of the pub sector’s thoughts and responses to the national living wage (NLW) is a concern.

A focus on only recruiting people under 25 or cutting down on opening hours to a five-days-a-week operation are just some of the worrying reactions to the legislation.

I’ve commented before that the NLW is something that our industry needs to support — to kick against it is only going to reinforce the view that our sector is poorly paid and not the place for a long-term career.

While I accept every business will need to adapt to absorb the potential cost increases of the new legislation, sticking to a policy of only recruiting younger people is hardly going to help reinforce views that the pub sector is the place for a rewarding and long-term career.

As for reducing opening hours, that feels like a step back in time, which, ultimately, is only going to damage a business going forward.

We need to find solutions to the challenges the NLW will pose, pushing for a reduction in business rates for example, but we need to try to ensure those solutions are positive, rather than reductive to the industry as a whole.

Perhaps we need to start thinking less of the NLW as a cost, and more as an investment into recruiting and retaining good people to help drive our businesses forward.

Related topics Legislation

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